Laws of Technological Progress

Laws of Technological Progress University of Waterloo December 7, 2009

J. Doyne Farmer Santa Fe Institute

from: A Short History of Technology, by T.K. Derry and Trevor I. Williams (1960). p.191.

Egyptian sledge

from: Life in Ancient Egypt, by Adolf Erman, p. 476

from: Life in Ancient Egypt, by Adolf Erman, p. 464

Outline • Why is technology an interesting topic?

• Are there laws for technological evolution and improvement in performance?

• Can they be used to make useful forecasts?

– Which methods work best?

– How can we use them to plan for the future?

• What causes such laws?

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Why am I interested in technology?

• Our understanding is pre-Linneus.

• Role of technology in human culture and well-being is huge and ever-expanding.

• We can measure its performance, and study how it changes with time.

• Aspect of human culture that makes progress.

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Happiness through time

from: Culture and Subjective Well-being, edited by Ed Diener and Eunkook M. Suh (2000)

What do I mean by technology?

• Lewis Mumford’s concept of technics – gadgets, artifacts, procedures, ideas, laws – a way of doing something

• Evolution of technology is in many respects similar to that of biological organisms.

– Darwin: Evolution = descent with variation and selection.

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Technological change is incremental (though with punctuated equilibria)

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The heroic theory of invention

from: “The Evolution of Technology,” by George Basalla (1988).

Newcomen’s steam engine

Hero’s steam engine (200 BC).

from: “The Evolution of Technology,” by George Basalla (1988).

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MUSHROOM CLUB

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from: “The Evolution of Technology,” by George Basalla (1988).

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There is no good classification system for technologies

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from: “The Evolution of Technology,” by George Basalla (1988).

Classification of machines?

• Early treatises on machines – Philo of Byzantium, 200 BC. – Hero of Alexandria, 62 AD., “Mechanics”, “Book on the raising of heavy weights”

• Five simple machines known to Archimedes – Lever, wedge, screw, wheel and axle, pulley

The five simple machines

Wheel and axle pulley

screw

wedge

lever

What is a machine? • Modern science is based on the mechanistic view, but there is no good definition of a machine.

• A machine is an assembly of matter capable of selectively altering other assemblies of matter. • The key property of a machine is its ability to implement a functional constraint.

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Are there laws for technological progress?

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Wright’s law (1936)

Progress depends on learning, proxied by production experience Cost vs. cumulative production = power law

Thomas Paul Wright

Ford’s model T

Wright’s law only works when reducing cost is main objective

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Moore’s law (1965)

Originally a statement about density of transistors We will use to refer to the hypothesis that technological performance improves exponentially with time

Gordon Moore

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Compatibility of wright and Moore (Sahal, 1987)

If production expands exponentially and costs drop exponentially, Wright’s law will hold.

Diversity of performance ratios

Performance curves for the EU 1980-1995 (IEA, 2000)

Progress ratios 108 cases, 22 field studies, electronics, machine tools, system components for electronic data processing, papermaking, aircraft, steel, apparel, and automobiles (Dutton and Thomas, 1984)

Alternative hypotheses Goddard: Economy of scale (this year’s production is all that matters) Sinclair, Klepper and Cohen (SKC) Both economy of scale (this year’s production) and learning (cumulative production) matter.

Nordhaus: Both exponential in time and power law in cumulative production.

Is technological progress predictable?

Joint work with Bela Nagy and Jessika Trancik

Testing for predictability through hindcasting Pretend to be at a given time in the past Use given method to forecast each future year Repeat for all past dates Score methods based on forecasting errors

Error analysis

Alpha: Sinclair 0.169

Wright 0.177

laggedWright 0.180

Moore 0.176

Goddard 0.202

p-values for pairwise comparisons: Sinclair Wright laggedWright Moore Wright 0.239 laggedWright 0.135 0.750 Moore 0.328 0.842 0.604 Goddard 0.000 0.003 0.009 0.002

Economic interpretation Economy of scale alone is not a good predictor of cost.

Cumulative production is a good predictor.

It is possible to make useful forecasts of technological performance.

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Model of learning

Joint work with James McNerney, Sid Redner, and Jessika Trancik

James McNerney

Sid Redner

Power law of practice

Improvement with practice in time to add two numbers (Blackburn, 1936)

Auerswald et al.

Production recipe Production costs are additive Each operation is affected by d operations.

Innovation proceeds through a series of trials in which d operations omega_i are altered.

Design structure matrix for automobile brake system

Algorithm Pick a component i Randomly change its cost and all the costs of the d components that it affects.

If the total cost decreases, accept the change.

Constant out-degree

variable out-degree

Predictions of model Rate of improvement depends on interconnectness of components, not on total number.

Variable interconnectness can cause punctuated equilibria in performance curve.

Better theory?

Need to think in terms of a network of diverse technologies like an autocatalytic set, e.g. metabolism technologies enable other technologies Need to treat change as an evolutionary process Theory should be able to say why some technologies evolve faster than others

Summary Very little is known about evolution of technology not even a Linnean classification scheme Technologies make predicable progress i.e. forecast is better than no forecast No good theory for technological improvement

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